Polys Hajioannou - Chairman and CEO Loukas Barmparis - President Konstantinos Adamopoulos - CFO Ioannis Foteinos - COO.

Alex - Citi Fotis Giannakoulis - Morgan Stanley Shawn Collins - Bank of America Merrill Lynch.

Thank you for standing by, ladies and gentlemen, and welcome to the Safe Bulkers Conference Call to discuss the Third Quarter 2015 Financial Results. Today we have with us from Safe Bulkers, Chairman and Chief Executive Officer, Mr. Polys Hajioannou; President, Dr.

Loukas Barmparis; Chief Financial Officer, Konstantinos Adamopoulos and Chief Operating Officer, Ioannis Foteinos. At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session [Operator Instructions].

Following this call, if you need any further information on the conference call or on the presentation, please contact Capital Link at 212-661-7566. I must advise you the conference is being recorded today 10 November, 2015.

Before we begin, please note that this presentation contains forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended, concerning future events, the Company’s growth strategy and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters.

Words such as expects, intends, plans, believes, anticipates, hopes, estimates and variations of such words and similar expressions are intended to identify forward-looking statements.

Although the Company believes the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.

These statements involve known and unknown risks, and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements.

Factors that could cause actual results could differ materially include, but are not limited to, changes in the demand for dry bulk vessels, competitive factors in the market in which the Company operates, risks associated with operations outside the United States, and other factors listed from time-to-time in the Company’s filings with the Securities and Exchange Commission.

The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto, or in any change in events, conditions or circumstances on which any statement is based.

And I now pass the floor to Dr. Barmparis. Please go ahead, sir..

Good morning. I’m Loukas Barmparis, President of Safe Bulkers. Welcome to our conference call and webcast. Let’s move to discuss the financial results for the third quarter of 2015, which were announced yesterday after the close of the market in New York.

In the present market conditions our Board considered prudent to suspend the dividend for the third quarter of 2015, which in addition are measured to strengthen our liquidity and balance sheet.

In Slide 3, we present our EPS and dividend history with a focus on pursuing lien operations targeting to reduce our operating expenses and our breakeven point. In this low market, the most important element is liquidity. On Slide 4 we present our liquidity topics.

As of September 30, 2015, our liquidity was well above our capital expenditure requirements, which we expanded till 2019 by delaying deliveries for seven out of eight of our contracted new fleets. Industry fundamentals are not positive. In Slide 5 we present the synergies of the market outlook.

On the top of the slide, we present comparison of the daily average 4TC higher for both Capes & Panamaxs. Cape except for a short lived spike during summer months for the whole 2015 have been trading lower than the respective periods of 2014.

Presently Capes are trading at USD6,000, lower on the year-to-date average of $7,000 and the five-year average of $12,000. Same for Panamax, the market over performed 2014 only during the summer months. Primarily Panamax market is trading at about $5,000 in comparison to $6,000 for the year-to-date and $12,000 on the five-year period.

Demand side presents substantial weakness. The official Chinese PMI Index for China’s steel industry fell below 50 indicating contraction affecting the trade of major bulks. I don’t know imports contracted so far for this year in China, Japan and Korea, this is a result of still production cuts with the exception of India where there is a slow growth.

The low iron ore prices continue as inventories at Chinese ports increase. Looking on the coal market year to date, China cut its coal import nearly by 30% in order to fight pollution and eliminate the oversupply of coal. Grain trade only of the three major dry bulk commodities is on track to recording new high.

The order book has also been increasing substantially as presented in Slide 6. Orders for the six -- for the next two years are significant; however, no additional orders are currently placed. Therefore the order book up to 2017 is almost zero.

For Capes and Panamax a good portion of existing fleet is over 15 years and maybe scrapped if low charter market persists, which will ease the oversupply. Scrapping activity has partially counterbalanced the oversupply during 2015. Year to date net fleet growth is f about 2.2%.

Panamax fleet has grown by 2% in 2015 with average sales with our order book spread until 2019. Moving on to Slide 7 on the graph, we present our fleet and order book. Currently we operate a fleet of 36 high specification vessels with an average age of six years.

We have pushed back until 2019 the delivery of our new fleets by 2019 one of the fleets is expected to be comprised of eco ship vessels. Turning to Slide 8 where we evaluate the performance of our chartering policy against the spot market, which will outperform most of the times as presented on the bottom graph.

We have significant number of vessels operating in the spot market as shown on the top of the figure maintaining flexibility in this weaker charter market. Going to Slide 9 we present on the bottom graph, our daily operating and channel and interest expenses. In G&A we include company's management fee expenses.

In total we paid daily $5,608 to run our vessels and our company for the first nine months of 2015. This figure includes all costs except the decision of financial expenses. It’s amongst the lowest in the industry and contribute significantly to a relatively low breakeven point, which is very important especially during weak markets.

The figure of daily OpEx also includes the dry-docking costs as seen on the graph per year. We have done seven dry dockings until quarter end this year.

On the top graph we present the average interest rate of 1.94% including the margin followed by launch and figures during the first nine months of 2015 maintaining low financing cost and preserving our financial flexibility. On Slide 10 on the graph we present our net debt per vessel ratio together with the fleet expansion.

The average age of our fleet is six years while currently the value of five year old Panamax is about $16.1 million as per the Baltic Exchange sale purchase assessment Index. Our intention is to maintain comfortable leverage on a net debt per vessel basis and comply with our financial covenants.

Our Chief Financial Officer, Konstantinos Adamopoulos will now present our financial results..

Thank you, Loukas and good morning to all. In Slide 12 we present selected financial highlights for the third quarter of 2015 compared with the same period of 2014. Net revenue decreased by 8% to $33.5 million from $36.5 million, mainly due to a decrease in charter rates.

Daily vessel running expenses remained stable at $4,550 compared to $4,542 for the same period in 2014 despite three dry docking concluded during the third quarter of 2015 compared to one during the same period in 2014. Interest expense increased to $2.8 million for the third quarter of 2015, compared to $2 million for the same period in 2014.

As a result of vessel sale and leaseback transaction, as well as in the average amount of loans and credit facilities and the weighted average interest rate of such loans and credit facilities. Net loss was $7.5 million for the third quarter of 2015 from net income of $1 million during the same period last year.

Adjusted net loss was $6.3 million for the third quarter of 2015 from adjusted net income of $1 million during the same period in 2014. EBITDA decreased by 38% to $9 million from $14.4 million during the same period in 2014. Adjusted EBITDA decreased by 26% to $10.3 million from $15.9 million during the same period in 2014.

Loss per share and adjusted loss per share was $0.13 and $0.12 respectively, compared to loss per share and adjusted loss per share of $0.02 and $0.03 in the third quarter of 2014. Moving on to Slide 13, we present definitions and reconciliation of our financial fundamental for the third quarter of 2015 compared to the same period of 2014.

On Slide 14, we present selected operational highlights for the third quarter of 2015 compared with the same period of 2014. Ownership days increased by 16%, available days by 14% and operating days by approximately 11%.

We operated an average of 35.98 vessels and achieved an utilization rate of 95.1% to an average of 31.05 vessels and the utilization rate of 99.1%. The average daily time charter equivalent per vessel was $8,843 compared to $10,736.

Moving on Slide 15, we present definitions and reconciliation of our operational fundamental for the third quarter of 2015 compared to the same period of 2014. As presented in Slide 16 and as mentioned [Audio Gap].

I think I need to dial back to Mr. Hajioannou..

Now I hear you. Now I hear you..

Thank you.

Loukas cannot hear you..

Mr.

Hajioannou, shall I redial Barmparis?.

Yes please redial them..

[Operator Instructions].

Yes there was technical glitch. I was still -- was in Slide 16, at this time our Board of Directors did not declare a dividend for third quarter of 2015.

Last October our Board of Directors declared a cash dividend of $0.50 per share on our 8% Series B preferred shares, a cash dividend of $0.50 per share on our 8% Series C preferred shares and a cash dividend of $0.50 per share on our 8% Series D preferred shares.

Each dividend was paid on October 30, 2015 to shareholders of record that was October 23, 2015. Summing up our presentation, as the market outlook is still challenging, we’re prepared as a long-term oriented company. We’ve been in shipping for more than 50 years with an outstanding track record and reputation.

We maintain low financial costs as a result of our low spreads and our prudent leverage for which in compliance with our financial covenants. We have extended our capital expenditure requirement in 2019 through the delaying of seven new builds.

We remain committed to a prudent dividend policy and at the same time ensure future expansion and deleveraging. You may find our contact details in Slide 17. Thank you all for listening and we're now ready to accept your questions..

Thank you very much indeed sir. [Operator Instructions] And your first question from Citi comes from the line of Chris Wetherbee. Your line is now open sir..

hi this is Alex in for Chris.

Thinking about your chartering strategy, looks like most of your vessels are locked in only until the end of the year or first quarter of next year, do you expect to employ this short term chartering strategy through '16 and at what point do you expect locking in fiscal into longer term charter?.

Yes, at the moment, the market is low and there is no availability of long-term charters. Obviously charters are very skeptical why to pay premium. And so we will continue our policy to operate between spot market and short period market.

So when we find suitable employment in the short period of market like four to six months, we’ll be fixing in four to six months. Otherwise, we’ll operate on a spot market cargo by cargo basis..

Okay. Thank you. And also it seems that delaying vessel in an effort to strengthen here liquidity during trough condition.

If you could just give us a little bit more color on your fleet expansion plan and if you expect to continue delays or maybe even some calculation as the market presents a challenge?.

Yes regarding our order book we don't expect to have any consolation. What we’re doing, we’re including contact with our shipyards and we manage to delay a good number on your buildings and to pour it into -- up to four years from today.

You may recall that about a year ago all our deliveries were supposed to be in 2015 and 2016 because they were new Eco vessels order in 2013. Now the same order book will push back into '17, '18 and '19.

So we’re in good contract and good terms with shipyards and to delay where possible the arrival of these ships, because none want to work new ships in a very low market..

And just touch on your dividend. Do you expect this to be one-off thing or do you expect distributions to be halt there in the near future as well..

Look everything depends, we've been saying in previous quarters and then in the last six quarters, we have been saying this that dividend is directly related to profits. So we stand by our policy of paying dividend.

We’ve demonstrated to the investor that we’re a company that wants to pay dividend to its shareholders, but given the persistently low market, which is expected maybe to prolong for 2016 we have to take this decision and we have to wait to see how the market develops in the following quarters before we decide to reinstate the dividend.

For the time being if 2016 stays low is more than likely that dividend will not be reinstated. But if the market changes and company stops having profits, of course we're demonstrated that we’re a company that wants to give money back to shareholders..

Okay. Great thanks. That’s all for me. I'll turn it over..

Thank you very much indeed. Now your next question from Morgan Stanley comes from the line of Fotis Giannakoulis and your line is now open..

Yes hello guys and thank you. From what I understand from your moves in cutting the dividend, but also in getting into a sale and lease back at a time that you have plenty of cash and already same available credit lines it seems that you're preparing yourself for a very long a very prolonged downturn.

Can you give us your view about the market? How long do you think that the current dreadful market is going to last and what do you think is going to make the recovery appear closer?.

Yes look if it's a reality like everybody else we see that 2016 will be a difficult year. I don’t think it can be as low as 2015 but nevertheless even a small improvement from 2015 levels will not change the big picture.

I think what once this 2016 goes out of the equation, the delivers in the dry bulk order book will be diminishing and we hope that the measures taken by the Chinese to reignite their economy like the repeated cuts of winter rates will start showing in the real estate market and in the housing market and slowly we will start to generate growth and demand for commodities.

So believe once 2016 is out of the equation things will start getting better. On the other hand as a company we have to have the liquidity if we market prolongs it's downturn in 2017.

We need to have the liquidity for 2017 and beyond also 2018 and this liquidity, which not needed will be used for investment -- could be used for investment in new ships in 2017 or 2018.

So it’s a positive thing that the company has done the sale and leaseback transactions at a time that such transactions were possible and we're still able to do them because right now, I think that more difficult to do similar transactions..

Thank you, Polys.

Can you also describe to us how is the debt market -- how do the banks behave in this current environment and not only on the borrowing capacity perspective, but mostly from bad loans they might have in the balance sheet and the risk of some of them having trade that they have to deal with and being forced to sell large amount of vessels, which it can create possibly shocking market.

Is this something that you might be aware of any situation or you might be concerned that it might happen?.

I think that the banks, the banks you have to remember that the banks have stayed in shipping in the last three, four years, have reduced from the number of banks we had in the past and the banks that have remained are more committed banks those take the long term approach.

They have seen the cycles in the past years and they don’t get panic very easily.

So some banks have gone out of the game in the last three, four years with a low tanker market and I believe those that have stayed are professional enough and wherever there is young tonnage involved and the age of the ship below 10 years, I think the banks are very cooperative and very relaxed.

Also a good sign is strong tanker market at the moment. So the tanker companies are making good profits and this is making the banks more or less pressurized. So I don’t expect the banks to create unnecessary problems to good management and to good companies.

I certainly believe that there are a lot of private owners in dry bulk sector, but they have loans that are higher than the market values of the ships and still there I don’t expect the banks and I don’t hear the banks doing unnecessary maneuvering. So overall I am pretty confident the banks this time will stand up to the task..

And I also want to ask about how do you do the health of the steel industry? We understand that many or most of the steel mills are losing a lot of money. Prices are below breakeven levels.

What shall we expect -- what do you expect to see in order for prices to recover? You mentioned the housing market in China? Do you foresee any capacity counts in the steel industry in China and how will this impact the dry bulk market?.

I think that the steel industry will adjust to the new reality and I think only the big still mills will be operating. There will be many smaller steel mills closing down. This is not necessarily bad for the market because if the more professional steel mills stay alive, this will create a better environment and a better market for the steel industry.

At the moment I think that China will take another six to 12 months before it clears the overcapacity in the housing market. We’ve seen that prices of houses start going up in China and we’ve seen that the months starts going higher, but there is a lot of overcapacity still to be cleared.

And in the long run, I am very optimistic about the dry bulk market. We’ve to be patient. The world is increasing, the world population is increasing. China may abolish this one child rule and Chinese people will start having bigger families.

All these things I think in the long run will create lot of demand for commodities and a lot of demand for dry bulk services. The most important is for companies to close down their hatches and reduce their cost and their expenses and try to steer through this next couple of years of low market.

So the companies that will manage to do this and reach 2017 and beyond, I think they stand to make very good profits in future years because will happen, what happens in the tanker business. That the upturn of the demand and the upturn of the shipping market will happen simultaneously with time, but there will be no order book and no deliveries.

So this rule will create a very nice upturn of the market like we’re seeing this year in the tanker business..

Thank you, Polys.

One last question, I think I have the answer, but I think I should ask your -- increase your liquidity, do you think that this is enough, do you feel comfortable enough with this liquidity and are there any thoughts of potential increase in your liquidity or even issuing equity anytime soon or this is something that you will completely dismiss?.

Yes I think we’ll be the last company to consider issuing stock and try to raise liquidity that way. I think that there are other ways still available to the company to increase even further its liquidity. I feel very confident with the current liquidity that we have that could be pushed that could take us through 2017 and 2018.

Of course we have the new buildings that we can try and delay even further where possible and on the other hand there are other ways that the company can keep increasing its liquidity without issuing shares. So we're fully focused on this ways and we're trying in a difficult market to being inventive and this is what we do here all the time.

The thing that in a bad market we have to prove ourselves, I believe 100% that our ship owners are now hands on their companies and they're trying to navigate through the bad weather.

We're doing the same and I think in following quarters you will see results that will be quite amazing on cost cutting and on other means and ways to increase the liquidity..

Thank you very much Polys..

In addition, what Polys said if you would like to see the Page 9, we have added the number of dry dockings for this year and the previous years that you may see what is our management and OpEx cost this year, and the number of dry dockings, which is a figure just below, which was seven this year and five the previous year.

So we have intensified our efforts for cut reductions in cost as much as possible so to lower our -- targeting to lower our breakeven point..

Thank you very much..

Thank you very much indeed. And your next question from Bank of America comes from the line of Shawn Collins. Your line is now open sir..

Great, thank you. Good morning and good afternoon, Polys, Loukas and Konstantinos. My question is regarding the terminated 10-year time charter contract that you had with DCKK in Japan for the vessel Kypros Sky.

I just wanted to ask how much money is owed to you or how much will you try to seek in claiming the loss for that vessel within the Japanese court system. Thank you..

Yes 10-year charter unfortunately happened this DCKK outlined for rehabilitation under the Japanese civil courts. We can do nothing about it. Of course our loss we cannot exactly calculate it at the moment because there is no such 10-year charter available to us in the market. So I think that our company more than likely will claim for the full amount.

Now what the court will allow we will see in the process and I don’t expect a big recovery of this claim.

On the other hand, I would like to say that over the years we had long trading history with this company and they performed over the years a very big charters and this charter was a good one, but on the other hand, was not anywhere near the previous sky high charter. And this was a vessel we bought for $28 million as a new building.

So it was not a vessel that cost us as a fortune and we were relying on the charter.

Of course there was out of this such story of big company like Daiichi shipping the rocks was that they delivered at the same time many ships in the market, which I believe it has influence on the current state of the freight market because you have to remember most of the ships they delivered were belonging to local owners, Japanese local owners, which usually traditionally they charter out their ships on five or ten periods and they have no experience of trading spot market on a trip by trip basis like say the Greek owners.

So this ship is keeping up the same time our market is causing us bigger headache than what is bankruptcy of Daiichi causing us from the loss of the Kypros Sky charter. But I think that the company will claim through the courts, the maximum amount and we will wait to recover whatever is recoverable..

Okay. That's helpful. Thank you, Lucas. A second question for you, financing related. You announced -- obviously you announced a sale leaseback agreement on September 21, it is an interesting financing solution, it frees up $47 million for you.

Can you talk about which bank you did this with and I know you may be able to or may not be able to and then also can you talk about your decision to do this transaction? Thank you..

We have not disclosed the bank. So this was a good transaction, which was appropriately described in our disclosures in our specific press release is a transaction which is finance transaction basically and we're very happy that we did this transaction because as we referenced, we increased our liquidity. We have not disclosed the bank..

The good thing I would add to what Lucas said on this transaction is that it's a 10-year transaction with the company say Bulkers holding the right up to two years to terminate it and every year annually after the end of the second year.

So it's an added benefit to the company that if we don't need it, we don't keep it for 10 years, we should run it through two years or three years or four years; So it's a very good flexibility that this transaction offer to the company.

It's a transaction we've been working since late last year 2015 because it takes a lot of documentation, a lot of visits before it comes to the table for signing.

So we have with us a back burner and we hope this summer that was a the trading market or not developing that way we were planning that we should have -- we should take this option as well and take in the extra liquidity..

That is helpful color. Thank you very much for the time and the insight today..

Thank you..

Thank you very much sir. [Operator Instructions] Gentlemen there appear to be no further requests for questions. So I pass the floor back to you for closing remarks..

We would like to thank all of you that participated in our conference call and we're looking forward to discuss again with you in our next quarter financial results. Thank you to you and have a good day..

Thank you very much indeed. So with many thanks to all our speakers today, that does conclude the conference. Thank you for participating. You may now disconnect. Thank you, gentlemen..

Thank you..

Thank you..

All the very best, bye, bye..